Is Niva Bupa’s IPO the right prescription for growth?
Subscribe to enjoy similar stories. Niva Bupa Health Insurance is poised to debut in the public market with its upcoming ₹2,200 crore initial public offering (IPO). The price band for the issue has been set between ₹70 and ₹74 per share.
The primary objective of the fresh issue is to strengthen the capital base, which is essential for maintaining and enhancing its solvency levels. Niva is among India's largest and fastest-growing insurers in the industry. The company focuses on the retail health insurance market, which currently accounts for about two-thirds of its gross written premium (GWP).
As this segment of retail health insurance continues to grow, Niva Bupa is well-positioned to take advantage of the increasing demand for health insurance products. However, it also faces strong competition from other insurers and ongoing challenges in achieving profitability. Also read | Swiggy IPO: Navigating a competitive landscape.
Can it deliver? Niva has demonstrated a resilient and diverse revenue stream, driven by rising technological spends that streamline operations and improve customer experiences. Over the past three years, the company’s gross written premium has grown at a compound annual growth rate (CAGR) of 41.3%. Its retail segment, which remains the primary contributor, reported an average growth rate of over 72% between FY21 and FY24, reinforcing the company’s robust market position.
Additionally, the group business segment experienced an average growth rate of over 25% during the same period, contributing to the overall upward trajectory. The company's commitment to technology is evident in the substantial increase in information technology spending as a percentage of operating expenses. “Over 50% of our new
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